How startup Myforexeye is catering to the foreign exchange needs of SMEs, individuals
Foreign exchange (FX) is one area that has largely remained untouched by the startup revolution. But this was bound to change. Anand Tandon, a financial markets veteran, with two decades of experience, decided to tap the potential that a relatively uncluttered foreign exchange market provided.
“I realised that various asset classes— debt, equities, commodities—had numerous players and a transparent ecosystem, but FX remained a closed market. This, despite the need for information and help among those who require FX services,” says 41-year old Tandon. There were a large number of people who needed FX services, but had to contend with what the banks offered, for want of other players.
Tandon decided to offer greater choice to people and started his own FX services company, Myforexeye, in March 2014. “Since the industry was yearning for innovative, fast, transparent and seamless transactions in forex exchange, I took the plunge and started Myforexeye,” says Tandon, who was inspired by the Bollywood movie Guru, to start his own business.
Myforexeye started out as an intermediary between entities in need of forex and banks— the company calls it Transaction Process Outsourcing (TPO). “SMEs have limited know-how of financial markets, hedging risks, etc. Their dependence on banks is very high and banks make the most of SMEs’ information gaps. TPO enabled SMEs to mandate Myforexeye to cover their forex transactions with their banks,” says Tandon.
From intermediating between banks and SME clients for FX rate negotiations the company has expanded its services to include price discovery, trade finance, customised risk management advisory and FFMC (full-fledged money changer) services for retail clients. “We are India’s first full-service forex fintech company providing foreign exchange products and services that cater to the needs of both businesses, particularly SMEs, as well as retail customers,” says Tandon.
Founded with an investment of Rs 3 crore, raised from friends and family, the startup has had a steep learning curve. While Myforexeye successfully negotiated its manpower, regulatory and finance-related challenges, its attempt to grow at a faster rate had to be reined in for the startup’s financial stability.
“We had our share of mistakes. We expanded to nine cities in the very first year of operations, but couldn’t sustain the cost pressures and had to scale down to three offices,” says Tandon. Cost rationalisation has worked in the favour of this company—it is among a handful of startups that have broken even in about three years’ time. “The lessons we learnt have helped us perform and scale in a better manner,” says Tandon.